In my experience if there is no smoothing groups, the lighting inside IMVU client looks very strange on surfaces... or when someone brings a facelight in a room and comes close to a wall which has no smoothing groups.

Reading this i realize i need to really learn 3dmax someday... lolol. I never paid attention to smoothing groups, i think by default it gets checked on group 1 always? Does that have any impact on the mesh itself?

3Ds Max always has several smoothing groups by default, at least in the standard shapes like boxes. But yeah, you can do some complex smoothing groups there.

In the first example, let's say that you'll make a kite shield with two slightly curved surfaces left and right with a sharper line in the middle. The simple way to do that without adding too much polygons to a mesh is to add smoothing group 1 to the left, and smoothing group 2 to the right. This way both sides will render smoothly, but they will also render separately so a sharper line appears to form in the middle.

In the second example, let's say that you want to make a detailed nose on a head with nostrils. Then doing this very recommendable:

Give the nostril polygons only the smoothing group 2, and the surrounding face skin only the smoothing group 1 to make the difference show properly in a lighting, accenting where the line goes.

But in the nose arm you can choose a solid row of polygons where the both smoothing groups, 1 and 2, are active. This is how the smoothing groups blend together smoothly where there shouldn't be any sharp lines for the lighting, but nostrils still appear to show as more defined.

So you can assign multiple smoothing groups to a single polygon and have the second example as the result. I hope this explains how smoothing groups work in Max...

Actually IMVU forgot to add the second example to their own anime default head. Bleh.